New Forbes Ranking Out Wednesday

Forbes magazine’s seventh biennial ranking of the best business schools will be published Wednesday (Aug 3). Perhaps more important than whether Stanford repeats its first place showing of 2009 is whether the return on investment for MBA grads has suffered yet another decline.

In the previous survey, Forbes had found that the financial payback of going to business school had fallen as post-MBA salaries lagged behind the rise in tuition and pre-MBA salaries. The median five-year gain for graduates of the top 50 U.S. programs was $29,000 two years ago, compared with $64,000 for the class two years earlier.

The Forbes ranking is based entirely on return on investment five years after graduation and nothing more–no GMAT or GPA scores, no student or recruiter polls, and no data on the percentage of grads with jobs at graduation or shortly after. To get the compensation numbers of MBAs five years out, Forbes surveys thousands of MBA alumni from more than 100 business schools.

Last time around, the magazine’s results were based on a survey of 4,080 responding alums from 103 schools. The data showed that alumni of the top five MBA programs–Stanford, Tuck, Harvard, Chicago and Wharton, respectively–typically earn more than $200,000 five years out of school.

Stanford topped that ranking because the median salary of an MBA from the class of 2004 was $225,000, highest among all U.S. rivals. Forbes figures that the typical Stanford student graduating in 2004 paid $235,000 for the MBA, a sum including two years of forgone salary (at Stanford the average MBA had a median salary of $82,000 before entering school).

Here’s the top ten schools in the last ranking and how they then compared to other major rankings: